The Money Mustache Community
Learning, Sharing, and Teaching => Investor Alley => Topic started by: MacGyverIt on December 08, 2012, 08:25:07 AM
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Hi folks,
I've a friend who is a Philippine resident, over the course of a few months I've advocated she invest her earnings for her long term financial health and thankfully she's expressed interest! She's at square one, in her 20s, and I don't have a clue as to how/what someone can invest in given her citizenship. Scrolled through several pages of Investment Alley posts and didn't see anything that seemed applicable for my friend's circumstances.
No Vanguard options, they only service Australia, Japan and Singapore.
Any advice we can provide to her would be welcome.
Thanks!
Mac
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Hey cool! It's great that you've gotten your friend interested in investing.
But I'm curious as to why you're looking at international options and not the local Philippine stock market. Since you mentioned she's at square one, it's a lot more convenient to start locally. The Philippine Stock Exchange is also doing extremely well right now. There are several options:
1. UITFs (Unit Investment Trust Funds)
- Basically mutual funds under a different name
- Offered by all the major Philippine banks
- The two largest banks (Banco de Oro (https://www.bdo.com.ph/personal/trust-and-investments/unit-investment-trust-funds) and Bank of the Philippine Islands (http://www.bpiassetmanagement.com)) give you the option to peso cost average (regular automatic debit from a savings account). I invest regularly in the Banco de Oro UITFs (one bond fund and one equity fund).
2. Mutual Funds
- Offered by Sunlife (http://www.sunlife.com.ph), Philamlife (http://www.philamlife.com/en/index.html), etc.
- Typically more expensive than UITFs because they charge a "sales load" on top of the regular fund management fee
3. Direct investments in the stock market
- COL Financial (http://COL Financial="https://www.colfinancial.com/ape/Final2/home/HOME_NL_MAIN.asp?p=0") is the most popular online broker right now. They offer a week-long demo account for free. However, if your friend is an absolute beginner, this may not be the best place to start.
Naturally this only skims the surface of the pros and cons of each investment. If you two would like to do your own research, you can visit these Filipino personal finance sites:
Beginner level sites:
www.readytoberich.com (http://www.readytoberich.com)
www.pinoymoneytalk.com (http://www.pinoymoneytalk.com) (they also have a forum)
Intermediate level:
www.investorjuan.com (http://www.investorjuan.com) (he has some old articles for beginners, but has recently moved on to more advanced investment math topics)
There's also been talk that ETFs (exchange-traded funds) will finally launch early next year (http://www.bworldonline.com/content.php?section=Finance&title=ETF-launch-eyed-next-year&id=62401). If you're dead set on the closest thing to an index fund, that might be worth the wait.
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My advice? Invest in the Philippines. That nation is at the threshold of a tremendous growth spurt, IMO.
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^I certainly hope you're right. The local stock market and property markets are sizzlingly hot. The Philippine Stock Exchange hit an all-time high for the 36th time this year. (http://www.abs-cbnnews.com/business/12/07/12/ph-stocks-surge-new-all-time-high) Great news, but it doesn't necessarily mean inclusive or sustainable growth. Fingers crossed!
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Hey cool! It's great that you've gotten your friend interested in investing.
But I'm curious as to why you're looking at international options and not the local Philippine stock market.
B/c you know far more about this than I do! My apologies, Adventine, I seemed to recall you cited your location as Philippine but wasn't certain and didn't see any of your posts right away. Thank you so much for spelling this out, I will print out your expert reply and provide it to her tomorrow.
Thanks for helping my friend get a start on her positive financial future!
- Mac
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^Hey, no problem! Always happy to help :)